Manufacturing activity in the New York region expanded at a much faster pace than anticipated in May, according to the Empire State Manufacturing survey results published Friday. The report carries particular significance as it offers the first read on manufacturing sector conditions for the month.
The general business conditions index climbed to 19.50 in May, its highest level in more than four years, from the April reading of 11, while economists had expected a reading of 7.30. The data for the survey was collected between May 4 and 11.
New orders and shipments increased considerably for the second consecutive
month. Unfilled orders rose but delivery times lengthened substantially and supply availability worsened somewhat.
The employment levels and the average workweek both continued to increase. There was no let up in the pricing pressure, as The pace of input price increases and selling
price increases picked up sharply.
Firms became optimistic about conditions in the month ahead. The futures business conditions index climbed 14 points to 33.5.
The data comes against the backdrop of a surge in inflationary pressure, stoked by the oil shock triggered by the U.S.-Iran conflict. The economic growth, however, has remained resilient despite the ongoing uncertainty.
The inflation spike has priced out any near-term rate cuts, with some quarters even modeling a rate hike to tackle inflation’s resurgence.
